JPMorgan Executes First DeFi Trade For MAS’ Project Guadian

On November 2, JPMorgan successfully completed the first live cross-border transaction utilizing Polygon. This accomplishment came as part of a pilot program being run by the Monetary Authority of Singapore (MAS).

In order to perform live trades with DeFi, tokenized deposits, and verifiable credentials, DBS and SBI Digital Asset have also joined the team.

The goal of the initiative known as Project Guardian at the MAS is to investigate the various ways in which conventional financial institutions can make use of tokenized assets and decentralized finance (DeFi) protocols to carry out financial transactions, among other potential applications of these technologies.

Milestone for JPMorgan

According to Sopnendu Mohanty, the Chief Fintech Officer of MAS, the live trials that were led by industry participants demonstrate that digital assets and DeFi have the potential to alter capital markets provided that the right guardrails are in place.

Mohanty referred to it as a significant step toward facilitating “more efficient and integrated global financial networks.” He went on to say that the Project Guardian has “deepened” the regulator’s understanding of the digital asset ecosystem and has contributed to the development of Singapore’s digital asset strategy. Mohanty called it a significant step toward facilitating “more efficient and integrated global financial networks.”

Moving forward, the Monetary Authority of Singapore intends to collaborate with an increased number of institutions in order to facilitate global learning on the rules, standards, and best practices for the industry’s “responsible innovation.”

JPMorgan Chase & Co.’s blockchain division for wholesale payments, known as Onyx, collaborated with the DBS Bank of Singapore, the SBI Digital of Japan, the Marketnode digital asset platform of the Singapore Exchange, and Temasek for the initial testing phase. In addition to simulating the purchase and sale of tokenized government bonds, the participants carried out a cross-border transaction including tokenized deposits of Singapore Dollars and Japanese Yen.

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Tyrone Lobban, Head of Onyx Digital Assets, tweeted the following to confirm the latest development:

“WORLD! J.P. Morgan has completed its very first trade using DeFi, Tokenized Deposits, and Verifiable Credentials on the public blockchain as part of MAS’s Project Guardian. This deal was conducted “LIVE.”

Lobban disclosed that the massive financial institution intended to conduct the deal on Ethereum and selected Polygon as their platform of choice due to the low cost of gas fees. However, future phases of Project Guardian would also investigate alternative blockchains, the executive said, citing the MAS’s objective for open and interoperable networks as the motivation.

JPMorgan used Aave to implement its permission pools concept, and also deployed a customized version of Aave Arc in order to define specific parameters, such as interest rate and currency exchange rate. In addition, the financial institution distributed a tokenized Singapore Dollar (TSD) deposit in exchange for the Japanese yen. TSD is a “native deposit token” that has a constant value on the blockchain and does not suffer from the scalability concerns that plague stablecoin.

W3C Verifiable Credentials were utilized by JPMorgan in order to give compliant access to Aave (VC). Instead of merely allow-listing addresses, venture capitalists, according to Lobban, offer a “fine-grained” level of control that can encompass risk limitations, asset limits, and other parameters.

A separate institutional wallet was also built by the bank with the intention of preventing traders from accessing business funds. On the other hand, transactions involving trades are restricted to being carried out solely with the assistance of validated DeFi protocols, and every trade institution possesses VCs.

The announcement comes just a few weeks after Jamie Dimon, the CEO of JPMorgan, reaffirmed his critical view on the asset class and referred to Bitcoin as a “decentralized Ponzi Scheme.”

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